November 28, 2007

 

CBOT Corn Outlook on Wednesday: Down 1-2 cents on strong dollar, weaker metals

 

 

Chicago Board of Trade corn futures are predicted to start trading 1-to-2 cents lower Wednesday, undermined by the strength in the U.S. dollar, weaker precious metals futures prices and the declines posted in overnight activity, analysts said.

 

In overnight electronic trading, March ended down 2 1/4 cents to US$3.98 1/2. E-CBOT volume in March was 4,747 contracts.

 

Corn will follow the direction set in overnight activity to start as the lack of fresh news should limit price volatility, a commission house analyst said. Metal futures are lower but crude oil is trading slightly higher, negating some of the bearishness from the weaker metals, he added.

 

The market remains at the mercy of outside market influences, an analyst says. The dollar is higher and near its highest levels in a week versus the euro, which is negative for corn but trading could be choppy and two-sided after recent price weakness. News that the U.S. sold corn to South Korea might also temper the downside as corn exports remain strong, the analyst added.

 

The U.S. Department of Agriculture reported that 120,000 metric tonnes of U.S. corn had been sold to South Korea for delivery in the 2007-08 marketing year.

 

On daily open auction technical charts, March corn futures closed lower Tuesday but near the session high, a technical analyst said. A stronger U.S. dollar and lower metals and crude oil prices pressured the market as profit taking added to the declines. No serious chart damage occurred and market bulls still have the near-term technical advantage.

 

The next upside price objective is to close prices above solid resistance at US$4.09, this week's high, with the downside objective closing prices below US$3.95. First resistance for March is seen at US$4.04 3/4 and then at US$4.07 1/2. First support is seen at Tuesday's low of US$3.98 1/2 and then at US$3.95.

 

In other corn news, cash corn prices in China rose in the week ended Wednesday as farmers were reluctant sellers on expectations of higher prices.

 

South Korean corn buyers have yet to place orders for May corn cargoes on expectations that freight costs and corn prices will decline in the coming months, an analyst said.

 

Corn futures on China's Dalian Commodities Exchange settled mostly lower with the benchmark May contract down RMB1 to RMB1,782/tonne.